If no TDS has been effected as the taxable salary of an employee is below the exemption limit after the allowable deductions (for eg., total salary Rs.1,82,000 and Deduction u/s 80C of Rs.3,000 so that the income comes down below the exepmtion limit of Rs.1,80,000)...then is issue of TDS certificate mandatory?
18 Replies
CA Rajesh Keshri
(CA)
(175 Points)
Replied 13 July 2011
No,if such income from salary is below exemption limit
Ajay
(CA Job)
(512 Points)
Replied 13 July 2011
Thank u...
@ U S Sharma...sir my query was whether in the above mentioned case, issue of TDS Certificate is mandatory ...
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 13 July 2011
TDS certificate is a document of "tax deducted at source"
when TDS is not deducted, its not mandatory
Sumit B Choksi
(CA Final)
(422 Points)
Replied 13 July 2011
Since the salary is below the basic exemption limit NO TDS is required to be deducted... Hence the issuance of TDS Certificate i.e. Form 16A does not arise..
Mahavir
(Student)
(161 Points)
Replied 14 July 2011
But you need to issue Form 16 i.e. Salary Certificate to employees...without this they cannot file their IT returns..
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 14 July 2011
salary certificate other than form 16 can be issued, but not TDS certificate.
Roopa
(Accounts Officer)
(38 Points)
Replied 14 July 2011
Whether Cess is applicable on TDS on Saalry??
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 14 July 2011
| Originally posted by : Roopa | ||
 |
Whether Cess is applicable on TDS on Saalry?? |
 |
yes, on salatry TDS , education cess + secondary and higher secondary education cess is applicable
Ankit Bansal
( Sr. TAX Accountant)
(42 Points)
Replied 14 July 2011
TDS Certificate is not mandatory if TDS is not deducted from salary i.e. exemption limit. and when u filed the return then no requirement of TDS certificate.
srinivasa.B
(CA final, Bcom )
(70 Points)
Replied 14 July 2011
Form 16 shall be issued for salary (also considered as TDS certificate) eventhough there is no deduction of TDS and salary income is not taxable.
For cess is agree with Mr.sharma.
Ajay
(CA Job)
(512 Points)
Replied 14 July 2011
Thank u all...so i understand issue of TDS Certificate is not mandatory if no TDS is deducted if the salary income is below the exemption limit....
Thank u all for the response...
C.A. Sandeep Wawhal
(CA, PGDFM, BCom)
(1831 Points)
Replied 14 July 2011
TDS Certificate is issued by TDS deductor to deductee as a proof for I.T. paid indirectly by assessee means by other party, so that if tds is not deducted then there is no requirement for issue of TDS certificate.
Regards,
C.A. Jignesh N. Mehta
(C.A.)
(1030 Points)
Replied 14 July 2011
Kindly find below Rules to Income Tax - Rule 26A
[Furnishing of particulars of income under the head “Salaries” 9 .
26A. (1) The assessee may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the details of the income under the head “Salaries” due or received by him from the other employer or employers referred to in sub-section (2) of that section and of any tax deducted at source from such income in Form No. 12B.
(2) The person responsible for paying any income chargeable under the head “Salaries” shall furnish to the person to whom such payment is made, a statement giving correct and complete particulars of perquisites or profits in lieu of salary and the value thereof in,—
(a) relevant columns provided in Form No. 16, if the amount of salary paid or payable to the employee is not more than one lakh and fifty thousand rupees; or
10 [(b) Form No. 12BA, if the amount of salary paid or payable to the employee is more than one lakh and fifty thousand rupees, which shall accompany the return of income of the employee.]
Explanation : “Salary” for the purposes of this rule shall have the same meaning as given in rule 3.]
As far as this rule goes for issuing the Form, some may take advantage of law which mentions words "may" or "any", but the practical problem is that one has to issue Form 16 whether TDS is deducted or not. Form 16 not only mentions TDS deduction details but also salary details. It would be a good thing to issue the Form 16.
Now from Legal Point of View
I qoute Sections 203(2) and Rule 31 to IT Rules
203. (1)Every person deducting tax in accordance with the foregoing provisions of this Chapter]shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.
(2) Every person, being an employer, referred to in sub-section (1A) of section 192 shall, within such period, as may be prescribed, furnish to the person in respect of whose income such payment of tax has been made, a certificate to the effect that tax has been paid to the Central Government, and specify the amount so paid, the rate at which the tax has been paid and such other particulars as may be prescribed.
From the above section 203(2), an employer shall furnish the certificate only if any tax has been paid to central govt. on behalf of the employee.
Now for Rule 31 of IT Rules states that employer has to issue TDS certificate in Form 16 . The said Rule states as under
31. (1) The certificate of deduction of tax at source or, the certificate of payment of tax by the employer on behalf of the employee, under section 203 to be furnished by any person deducting tax in accordance with the provisions of
(a) section 192 shall be in Form No. 16
Hence, it is lawfully allowed to refuse to issue a certificate of deduction of tax when there is no deduction of tax.
So finally, From all above rules 31 and 26 and section 203 , legally no binding on issue of TDS certificate if no TAX is deducted.
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